SCI Settles Neptune Society Lawsuit in Florida
Service Corporation International (SCI) has settled a federal class-action suit against its Neptune Society cremation division, agreeing to pay up to $209 million in full refunds of all products and benefits purchased to 87,000 Florida preneed customers if they choose to cancel their contracts.
Neptune, which is now called SCI Direct Inc., was named as a co-defendant in a lawsuit filed in April 2020 in Fort Lauderdale’s U.S. District Court by Nancy Taylor of West Palm Beach. According to this article originally published by the South Florida Sun Sentinel, Taylor alleged that Neptune duped her and tens of thousands of other Florida customers by not placing the required 70% of their prepaid funds into trust and refusing to provide 100% refunds upon request. Each of these tenets is required by Florida law.
Two contracts required
According to Taylor’s suit, Neptune required customers to sign two contracts — one for the cremation itself and another for “related merchandise,” including a memory chest, urn, keepsake plaque, travel plan, and a $185 planning guide. The suit also alleges that Neptune recorded the value of its cremation services at an amount much lower than they would have had to report if the customer purchased cremation services alone.
The end result of what the lawsuit called “bookkeeping sleight-of-hand” was that Neptune placed “barely 50%” of the required amount into a trust. Additionally, requests for refunds on the merchandise only were treated as a request to also cancel the cremation services agreement.
The settlement will require Neptune to make refunds available to all Florida customers who purchased preneed agreements, travel plans, and merchandise since April 1, 2016.
SCI denies wrongdoing
Despite the settlement agreement, SCI still denies the allegations of the lawsuit.
“While we strongly maintain there was no wrongdoing on Neptune’s behalf, in an effort to move forward and continue our full focus on serving our families, we agreed to settle the remaining disputes,” an SCI spokesperson said.
She also stated that SCI doesn’t expect a large number of refund requests.
“Based in part on our customer surveys and because we don’t believe any of our customers were deceived, we are confident that our customers value our products and services and do not believe there will be a material number of cancellations. We stand behind our products and services and are honored by the continued loyalty our customers have shown us,” she said.
Dueling lawsuits in California
The Florida lawsuit alleged infractions similar to those filed by the State of California in 2019. In December 2019, Connecting Directors reported that California’s State Attorney General Xavier Becerra and three San Francisco Bay district attorneys accused SCI’s Neptune Society and its subsidiary Trident Society of:
- Failing to hold in a fully-refundable trust more than $100 million customers paid for Neptune cremation plans (pre-need trusts have been required by law in California since 1965 to ensure the availability of full refunds)
- Failing to issue full refunds to customers who canceled contracts
- The potential inability to issue refunds to thousands of other prepaid customers who might cancel their plans
- Falsely claiming to use its own crematoriums when it actually contracted with others
- Illegally accelerating payments when customers died
- Steered 99% of customers to its Standard Neptune Plan which included both cremation services and related products, but then illegally kept about half that amount which was earmarked for the products
- Inflating the assigned value of above-mentioned products, including a fiberboard urn, a fiberboard memento chest, and thank-you cards (which, with cremation services, typically runs about $2,500)
The California suit asked for civil fines and court orders requiring Neptune and Trident to put the full amount of money collected in the past into pre-need trusts and to stop the allegedly deceptive practices. In response, SCI filed a countersuit against the attorney general’s office in Sacramento County Superior Court claiming they had done nothing wrong, and contended that “their trusting practices as described are entirely consistent with California law and standard industry policies and practices in use by licensed funeral establishments throughout California.”
No updates on either of the California suits could be located at this time.